What is the United Nations’ Net Zero Banking Alliance?

In today's rapidly changing world, sustainability has emerged as a critical priority for businesses across all sectors – including banking. 

As stewards of financial resources and influencers of economic trends, banks play a pivotal role in driving sustainable development. Striving for sustainability is not just a matter of corporate responsibility – it is essential for managing risks, seizing new market opportunities and meeting the growing expectations of stakeholders. 

By integrating sustainable practices into their operations and strategies, banks can enhance their long-term resilience, support global efforts to combat climate change and foster a more inclusive and sustainable economy.

Consumers, partners and stakeholders are urging banks to further prioritise sustainability, with 73% of banks striving to offer more sustainable options in the next five years to meet customer demand and 24% of European customers likely to switch banks due to ESG.

Throughout sustainability, many organisations praise the benefits of partnerships and collaborations – and banking is no different.

What is the Net Zero Banking Alliance?

Founded in 2021, the Net Zero Banking Alliance (NZBA) is a group of leading global banks committed to aligning their lending, investment, and capital markets activities with net-zero greenhouse gas emissions by 2050. 

Led by banks under the umbrella of the United Nations, NZBA works to provide framework, guidance, and peer learning opportunities to support members to design, set, and achieve credible science-based net zero targets for 2030 or sooner.

FAB: Steering sustainable banking

At the heart of NZBA is its Steering Group, which represents the alliance’s 144 banks through 14 banks each selected by member banks. 

Recently appointed as Chair of the NZBA Steering Group is First Abu Dhabi Bank (FAB). 

“Prior to the Net-Zero Banking Alliance, banks were trying to create their own frameworks towards decarbonization,” says Shargiil Bashir, Chief Sustainability Officer at FAB. 

“Moving to a common framework under the NZBA was a very important first step. However, we now need to go further to take regional context and regulations into account. 

“Decarbonisation journeys can look different in different parts of the world. With regional sub-frameworks, we can move towards measuring our clients in the right context. What works for the EU and the USA may not be the same process as in Africa, India or the MENA region.”

With a pledge of more than US$135bn towards green finance by 2030, FAB is a force in sustainability in the MENA region working to bring more financial institutions in the area into NZBA, as well as supporting the UAE’s net-zero ambitions.

In 2017, FAB was a signatory to the Abu Dhabi Sustainable Finance Declaration, before becoming the first bank in the UAE and Gulf Cooperation Council (GCC) to join NZBA in 2021.

“Financial institutions have played key roles in several transformations over past decades, including the move to digital, and the rise of ESG and compliance considerations,” Shergiil shares. 

“We must also play a similar role in confronting the challenge of climate change. We are advocating for more banks in Africa and the MENA region to commit to collective action and join the NZBA by then because it’s not possible to achieve net zero without their involvement. These are big challenges where FAB can facilitate discussions and help catalyse action.”

The members of the Steering Group are:

• Amalgamated Bank
• Bank of America
• Banorte
• BBVA
• CIMB
• Citi
• FAB
• La Banque Postale
• Lloyds Banking Group
• Maybank
• MUFG
• Nordea
• RBC
• Westpac

The Steering Group aims to represent the wider members of NZBA, with Nordea currently representing the Nordic region. 

“In recent years we have seen a wave of new standards, initiatives and principles to help speed up and make the financial industry’s sustainability actions more ambitious, transparent and comparable,” says Anja Hannerz, Head of Group Sustainability at Nordea.

“Although these standards and guidelines have a big impact on financial institutions and ultimately on corporates’ strategies and targets, the Nordic presence in the decision-making has been thin. 

“We think it’s important to have a Nordic voice in the decision-making and hope to contribute to the acceleration towards net zero.”

“It’s a recognition of our position in the industry globally on climate and environmental topics,” says Peter Sandahl, Head of Climate and Environment at Nordea. 

“We already have a leading role in other central climate-related initiatives which is unique and connects to our ambition to be a leading actor, driving ambitions and standardisation across the industry on a global scale.”

“It’s a recognition of our position in the industry globally on climate and environmental topics,” says Peter Sandahl, Head of Climate and Environment at Nordea. 

“We already have a leading role in other central climate-related initiatives which is unique and connects to our ambition to be a leading actor, driving ambitions and standardisation across the industry on a global scale.”

All eyes on sustainable finance

As this year’s COP summit has stated, climate finance is a global focus in efforts to reach the targets set in the Paris Agreement. 

With the summit coming up in November, all eyes are on the world’s largest financial institutions to see how they will approach the new climate action fund, which goals will be hit – or missed – and if these institutions will put their money where their mouths are.

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